Costs and protectionism hindering Wizz in Belgrade


Low cost carrier Wizz Air has said that high airport costs and government protectionism of Air Serbia are preventing it from developing at its Belgrade base. Speaking to EX-YU Aviation News, the airline's CEO, Jozsef Varadi, said, "I think the significant issue in Belgrade that has hindered our development there is the cost of the airport relative to its peers. It is a high price airport and we need to see costs coming down. As we are bringing in more passengers and operations to the airport, we need to be at least in line with what we are paying at similar places. I think that is one issue. We will see what VINCI will bring into the party. I don't know".

The CEO added, "I think the Serbian government has taken steps towards protecting Air Serbia's business and I think they are trying to put some pressure on competitors like ourselves. These two factors are really holding us back in Belgrade. Nevertheless, we are totally committed to the market and we hope to see some improvements of commercial terms in the marketplace and certainly that would attract us with more capacity". Wizz Air carried 745.000 passengers on its flights from Serbia in 2017 and put some 900.000 seats on sale from the country this year.

The low cost airline expanded its operations from Belgrade last year when it based a second aircraft in the city and launched four new routes. The expansion came three years after it decided to significantly slash its services from the Serbian capital following a public spat over fees. This resulted in the airline relocating one of the two aircraft it had stationed in Belgrade. At the time, the carrier said the city had become one of the most expensive in its network and accused "wannabe monopolists" Air Serbia and Etihad Airways of being behind the surge in fees. Since last year, Wizz Air has discontinued flights from Belgrade to Nuremberg and Friedrichshafen, and turned its year-long service to Larnaca into a seasonal summer route.

Comments

  1. The airport has the right to charge as much as they want, as long as they charge the same amount to every airline. They are obviously putting pressure on VINCI with these statements.

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    1. But they are not charging everyone the same. Air Serbia gets discounts.

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    2. Air Serbia transports 2 million pax.

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    3. No, they charge JU the same. Discounts stopped last year I think

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    4. They get incentives (like every airport has) based on traffic volume.

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    5. And it is perfectly logical!

      It looks like that W6 would be the happiest if BEG offers to them the same as SKP.

      Malo morgen :-)

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    6. Yeah, every airport does this:
      1 AC - list price
      2 AC - list price
      3 AC - list price
      4 AC - list price
      5 AC - list price
      ...
      9 AC - list price
      10 AC - 50% discount

      Not dodgy at all, right?

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    7. BEG has discounts based on volume and I think it's at one million passengers. Wizz is at 750.000 so they are not far behind. They didn't complain when the previous government gave them preferential treatment.

      Wizz gets the same as easyJet which is growing at BEG. W6 had years to do something here but it didn't. You snooze you lose.

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    8. are you being serious that JU is not getting the discounts?
      not paying airport taxes (last time 2015, if i remember correctly) and getting discounts are two different things.

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    9. They should get discount, it is normal and logical

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    10. Wizz is just above 500k. easyJet is ~10x less.

      The discounts are tailored at 50% for Air Serbia and 0% for everyone else, as per 9:15 posting. That's not a commercial volume discount which would scale at different levels, it's an outright state sponsored protectionism.

      It's even done through APD - not even contracted so subject to change at the whim of the operator. Unreliable at best, bound to get changed the minute there's a chance W6 catch up.

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    11. Few days ago there was information here that LH either has huge discounts in MUC or does not pay the services there.

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  2. that's bollocks they've been saying that for the past five years, and have been doing well all the time

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  3. This is already message for Vinci.
    W6 is lucky because FR did not start flying to BEG, otherwise their crazy expensive prices would surely go down.
    As soon as easyjet opens the base in BEG they are going to sing different song.

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    Replies
    1. Is there a valid source for the rumor that EZ is opening a base in BEG?
      Or is it just wishful thinking?

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    2. Based on the reply from easyjet about opening the base and based on the experience of other Vinci airports in Europe it is very likely BEG will become U2 base.

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  4. One message to mister Varadi: get Serbian AOC!

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    1. Why would they need a Serbian AOC?

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    2. In order to launch routes that would actually profit Serbian tourism industry and enhance connectivity.

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    3. Wizz is not bringing any connectivity benefit to Belgrade and Serbia.

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    4. Unless you are flying to a remote German village. :D

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  5. Ooooh boy, it's going to be a fun day. *grabs popcorn*

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  6. So in BEG they are having problem with high fees and government protectionism of ASL. Using that logic at INI they do not have problem with high fees but they still do have aaproblem problem with government protectionism of ASL that even do not fly from INI. So was that a real reason why government took control of INI? Seems like Mr Varadi will change Wizz livery to yellow me thinks.

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    1. INI has a much smaller market which depends 90% on gastos who travel only in summer and around New Year. That's the problem for them in INI.

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    2. INI is not only a gasto airport. There are business and leisure travellers too.
      Also transfer one coming from and to ZRH.

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    3. Business on FR?

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    4. Transfer from ZRH? to where?

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    5. Well, FR is also used by business men and even politicians. If you have a direct flight, nice hours and cheap price, why not?
      Both Berlin and Milan are business cities with industry and IT centres.

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    6. With 2x per week in the middle of the day (Berlin lands at 15:05) I doubt any normal business man would use them.
      Most business travel agent do not even list those companies.

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    7. How wrong you are! All over Europe people use LCCs for business, especially when it offers direct connections.

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    8. Very few city pairs have convenient times for business passengers. Only those with massive demand.

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  7. I don't get how easy jet doesn't find the prices to be high?

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    1. easy jet flies three routes to Belgrade, Wizz has two planes there and brings over 500,000 passengers to BEG. It is logical that thy get some discounts based on volume, but they don't.

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    2. easyjet has opened 2 new routes in BEG in last 12 months unlike Wizz air.

      Their time for expansion in BEG will come very soon!

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    3. They said a few months ago that people should ask them about base opening in BEG next year, which pretty much means they will announce a base some time in 2019, probably to open in 2020.

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    4. Their volume isn't big enough for the airport to give them discounts.

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    5. There is no good enough reason to justify Wizz ignoring Berlin and Barca.

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    6. Two airlines already fly to Berlin - Air Serbia and Easy Jet.

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    7. easyJet just launched it. For decades now it was only JU

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    8. Wizz air stubborny ignores BCN from BEG but they are first to complain about BEG.

      Surprisingly this "market orientated company" did not complain about the money the keep getting from SKP or subvensions for the flights from BUD to SJJ for example.

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    9. If W6 launch BEG-BCN then VY are doomed. FR and W6 both kicked VY out of SOF a couple of years ago. Also their schedule was quite s*itty.

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    10. They are no longer getting any $ from SKP mate.

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    11. For many years they were reciving money from SKP.

      VY should be kicked if they can't compete. Nothing wrong with it especially taking in consideration how awful their flying times to BEG are and how often they are delayed.

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    12. VY has a very bad reputation in general concerning punctuality. During the summer peak period, they have many many delays especially to the Balearic Islands and Canary Islands.
      Delays of up to 10-16 hours! Really unreliable and it's a pity because they have a nice marketing campagin and super cool logo and name.
      The only good thing is that it's part of IAG and have a nice Frequent Flyer programme too.

      JU and Wizz should take lessons from VY when it comes to marketing and advertising.

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  8. If he is not happy in Belgrade he is free to move those Wizz planes to Zagreb.

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    1. They have the same issue there too.

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    2. Wizz can't possibly have the SAME issue in ZAG, they don't fly there at all.

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    3. Then Osijek is the way to go... Right between the two cities and they are desperate for new customers.

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    4. Osijek is too far for most passengers, moving there instead of ZAG would only mean protection for OU.

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  9. Wizz expect to get paid to fly to an airport not to pay any fees. Ryanair works to the same principle.

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    1. What Wizz Air was expecting is that Jat Ariways would go bust and that they would become the de facto national carrier. But it didn't pan out that way.

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  10. Hopefully things get better with Vinci.

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    1. Varadi does not sound too optimistic there either.

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    2. Because he is aware that VINCI and the government made a deal for Air Serbia not to be exposed to too much competition. Same thing as what happened in Zagreb.

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    3. They also made a deal for fees to remain unchanged.

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  11. Wizz does not fly to some airports in the ex Yu region and has much smaller presence in many other airports like SJJ or LJU yet CEO did not find honesty to complain about those other airports.

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    1. He was obviously asked about BEG.

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    2. and BEG is much bigger (thus more interesting) than LJU and/or SJJ

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    3. Tuzla and Nis are smaller than SJJ, LJU and ZAG so that's not an excuse for Wizz to skip interest and growth in those airports and complain about Belgrade. I hope Vinci will replace Wizz with better airlines in BEG.

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  12. During the Jat Airways era Wizzair paid 50% less than the other airlines.

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    1. True. Wasn't the ex BEG CEO arrested for that?

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  13. COuld this be real? This makes appx 83% load factor in Serbia if the numbers are approximately correct...Sounds low for a ULCC.

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    Replies
    1. You are moxing two different years. First number is passengers carried in 2017, the other is capacity in 2019. They added new routes to Nis this year and had new aircraft based in BEG from start of the year, compared to June 2017.

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    2. sorry, you are right, I think the passanger number refers to 2018 if I read it again.

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  14. FR was trying to throw the same tantrum in ATH, screaming aloud how the fees are the highest in Europe bla bla. Since their cries were ignored they opened all the routes they wanted in the end w/o discounts. This PR thing is a classic spin for low-cost companies.

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  15. U cemu je problem?
    Ponuda/potraznja=cijena
    2 poslovna subjekta, svaki gleda svoj interes.

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  16. This really brings into perspective just how high ZAG fees are when airlines are complaining about fees at BEG which is cheaper AND has a larger market. Base fees at ZAG should be 12€ at most, not 17€. Judging by the number of security lanes open at ZAG, security fees should be slashed by 50% as well.

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  17. Serbia is afraid to lose JU if they allow W6 to expand, which SHOULDN'T be like this.
    Take RO, FB & PS as good examples.
    In OTP W6 is a monster compared to FR, but RO is still surviving even being a complete legacy airline. It focuses on domestic travel and now heading towards the Causcasus.
    In SOF W6 stepped a bit, as FR are being very agressive on pricing still dominating the German and UK market. FB focuses on other more profitable markets such as PMI, PRG and VAR for instance.
    In KBP, PS is doing quite well even with the arrival of FR (although still early as they recently stepped it).

    In INI, LX is still enjoying high LF and even frequency increases even though you have flights from INI-BSL.

    So, BEG needs to lower its pants for once and allow W6 to expand and to please stop protecting JU for once!

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    Replies
    1. Amen brotha. A decent argument, finally. +1

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    2. Lol, great argument with airlines on the brink of bankruptcy, amen.

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    3. Yep, we kept hearing about the bankruptcy of Tarom and Bulgaria Air ever since W6 first flew to Romania and Bulgaria in 2004-2005 :D

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    4. LOL, Wizz should stop protecting LH and Germany interests in LJU and ZAG (Fraport, 4K, Star Alliance airlines as de facto LH feeders) and start competing there first.

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    5. I sometimes wonder how many persons are actually flying with all airlines that are taken as example for various success stories...

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  18. It is a public secret that government wanted to force W6 to move all operations to Nis.

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    Replies
    1. It obviously didn't work.

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    2. Well if it is true, they at least made Wizz launch flights from INI.

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    3. And now they want to chase them out from there.

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    4. The ASL project is the top priority.
      We should all assist by flying with JU more often.

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    5. No one is chasing them out anywhere.

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  19. They are unhappy with BEG yet they based a second plane there less then a year ago...

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  20. They always want to fly somewhere preferably for free.

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  21. Tamo gdje je skupo, drugi avion u bazu se ne vraca. Ovo je smijesna prica.

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  22. Personally I don't think that these cockroaches of companies (or quite frankly any companies) should ever be given a special treatment.

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    Replies
    1. That should apply for Air Serbia too. Do you consider them a cockroach comoany as well?

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  23. BEG still remains one of the most important and profitable W6 base. The golden routes are>>

    BEG-MMX (up to 5 weekly!)
    BEG-MLA (who would have thought up to 3 weekly)
    BEG-EIN (4 weekly permanent)

    Should they base another aircraft, then the should launch:

    BCN, LIS, SXF, TFS, BOD, BHX, LED, PMI, RAK and eventually VKO

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  24. What keeps JU (and others) from increasing prices is the pressure from low cost competition. I haven't flown with W6 but I am happy for their presence, as they have lowered the prices of my tickets.

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    Replies
    1. I wouldn't say JU is particularly cheap.

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    2. JU is cheap if you are using it for connecting through BEG.
      If your journey starts or finishes in Serbia then yes, they are usually expensive.

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    3. This is true what last anon says. They are currently offering crazy cheap fares New York-Belgrade-Beirut. Something like 350 euros.

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    4. LH offers FRA-JFK for 270 eur. So what?

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  25. Yes, Adria, AirSerbia, Croatia etc live (or in the case of Adria, have lived) of government handouts. And yes, all of the lo-co's are doing exactly the same. There is no free market in aviation

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    1. Majority of the LCC routes are not subsidised, if there is enough demand. Obviously nobody will fly triple daily with 180 seats where there's not enough demand and make loss.

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  26. Interestingly Wizz has failed on most routes they went to head to head with JU - Brussels, Rome, Larnaca... and my guess is Paris soon.

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    Replies
    1. If they fail in Paris it won't be because of JU but because of Air France and ASL.

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  27. Cry me a river.

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  28. Locals who fly this airline, do they pronounce it properly or do the call it Vizz Air?

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    1. Most people pronounce it Viz as there is no "W" in the Serbian language.

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    2. "W" is not a sound actually. You could always pronounce "uiz er" like the Bulgarians correctly do.

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    3. actually i disagree. W is a sound in English, just not in your head. it's not oo--ee. W as in win. ooeen would be a complete bastardization.

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  29. Just the usual noise from Wizz.

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  30. At least Varadi says they are committed to the market so they won't close the base.

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    Replies
    1. That's just posturing. If they get more competition on key routes Wizz will certainly reduce the presence or close the base.

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    2. Yeah sure... just like they have done elsewhere where they got competition.

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  31. A do pre 5 godina kada su oni dobijali subvencije a JAT io pred gasenjem,to je bilo u redu. Licemerno.

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  32. JU will survive as long as Serbia is out of EU. Wizz is big, but gov't is bigger and some egos even bigger.
    It would be interesting to see if Vinci continues with this subsidy masked as 'volume discounts'. Wizz could have called the bluff, but they knew gov't would have moved the goal posts.

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  33. Boohoo... cry me a river, build me a bridge and get over it.
    Wizz is throwing a tantrum because if they accept higher fees in BEG then other airports might follow them. Look at what's going on in BUD. They have a massive fortress hub there but the airport has been unprofitable for a decade now. Only goes to show that someone has to lose when it comes to cheap air travel- either the airline or the airport.

    If Wizz is annoyed by high charges, well, they can pack up and leave but I am sure someone else will rush in to fill their void- as easyJet is slowly doing.
    For ages now they were lazy and unimaginative when it came to BEG. They only launched random gasto routes and now they complain they don't get preferential treatment? Sure.

    Thanks but no thanks.

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    Replies
    1. totally agreed. i hate when execs whine... i want them to lead and inspire.

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  34. This sounds like a total cop out. Like, I can beat China in manufacturing, if only my government imposed tariffs on Chinese goods and gave me some cash to start up my own manufacturing.
    I think this Varadi dude needs to go back to a drawing board and figure out how to compete in BEG if that's a priority. Or otherwise bail and be cool with that.

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  35. Can anyone guess which new airlines we could realistically expect in BEG?

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  36. FUCK BELGRADE, If our gouvernement(SNS) get rid of low cost companies in Niš just to show force to be reckoned with, you will get protests bigger than in France.

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